Buss1001-Case Study
Recommendation to the ANZ Banking Corporation Board
Recently, ANZ Banking Corporation has made a decision of outsourcing and offshoring a certain amount of jobs to minimize its increasing cost pressures. At the same time, critics doubted if the decision was a good choice as a cost cutting measure for the bank (Wade and Hawthorne 2012). There are ethical issues, security concerns and managerial control which need to be taken considerations for outsourcing and off-shoring. Soyref (2012) defined outsourcing as the provision by a third party to provide services and activities that can involve a transfer of assets and staff. By definition, offshoring refers to a financial organization whose headquarters lies outside the country (Soyref 2012).
Rationale
The reasons why ANZ should address those top three issues created by the decision to engage in an off-shore outsourcing initiative in order to achieve a sustainable competitive advantage and operate successfully in the long term.
Ethical issues
ANZ hires employees in Manila who are high educated and with similar experiences in that field. By comparison, the Philippines’s workers have relatively lower salary of $ 11000 than Australians (Wade and Hawthorne 2012). Outsourcing reduces the cost in salaries of staff, but it also creates some ethical issues that probably erode the reputation of ANZ. It has hired more employees in other countries while it means that the local workers will be losing their jobs in the long run. Soyref (2012) mentioned that, in utilitarianism theory, entities should maximize satisfaction of individual happiness). To maximize utility, it suggests that business managers ought to seek to maximize profits in the ‘neo-classical free market economics’ (Shields 2012). It can be argued that ANZ seems to be egotistic because of cutting jobs in Australia to take advantage of cutting costs. It just maximizes its own happiness but not to the local workers. Egoism is a consequentialist theory; and it
Recently, ANZ Banking Corporation has made a decision of outsourcing and offshoring a certain amount of jobs to minimize its increasing cost pressures. At the same time, critics doubted if the decision was a good choice as a cost cutting measure for the bank (Wade and Hawthorne 2012). There are ethical issues, security concerns and managerial control which need to be taken considerations for outsourcing and off-shoring. Soyref (2012) defined outsourcing as the provision by a third party to provide services and activities that can involve a transfer of assets and staff. By definition, offshoring refers to a financial organization whose headquarters lies outside the country (Soyref 2012).
Rationale
The reasons why ANZ should address those top three issues created by the decision to engage in an off-shore outsourcing initiative in order to achieve a sustainable competitive advantage and operate successfully in the long term.
Ethical issues
ANZ hires employees in Manila who are high educated and with similar experiences in that field. By comparison, the Philippines’s workers have relatively lower salary of $ 11000 than Australians (Wade and Hawthorne 2012). Outsourcing reduces the cost in salaries of staff, but it also creates some ethical issues that probably erode the reputation of ANZ. It has hired more employees in other countries while it means that the local workers will be losing their jobs in the long run. Soyref (2012) mentioned that, in utilitarianism theory, entities should maximize satisfaction of individual happiness). To maximize utility, it suggests that business managers ought to seek to maximize profits in the ‘neo-classical free market economics’ (Shields 2012). It can be argued that ANZ seems to be egotistic because of cutting jobs in Australia to take advantage of cutting costs. It just maximizes its own happiness but not to the local workers. Egoism is a consequentialist theory; and it
References: Bucki, J. 2009, ‘Top 6 Outsourcing Disadvantages’, About.com. Business and Finance Operations/ Technology, viewed 4 May 2012, < http://operationstech.about.com/od/outsourcing/tp/OutSrcDisadv.htm> Hartman, L. and DesJardins, J. 2006, Business ethics: decision making for personal integrity and social responsibility, McGraw Hill, Sydney. Needle, D. 2010, Business in context: an introduction to business and its environment, 5th ed., Cengage Learning, Andover. Porter, M.E. 1980, Competitive Strategy: techniques for analyzing industries and competitors, Free Press, New York. Schneier, B. 2002, ‘The Case for Outsourcing Security’, Supplement to IEEE Computer Magazine, viewed 5 May 2012. Shields, J. 2012, Understanding Business (BUSS1001), at The University of Sydney, Sydney, 20March. Soyref, M. 2012, Understanding Business (BUSS1001), at The University of Sydney, Sydney, 27 March. ‘The Ethics of Outsourcing’, 2010, Outsource2india, viewed 6 May 2012, Wade, M. and Hawthorne, M. 2012, ‘Off-shoring: high price of low cost’, Sydney Morning Herald Business Day, 28 January, viewed 5 May 2012,